Fall River could face uncertain future if the fiscal 2015 budget fails to pass

Saturday

Jun 7, 2014 at 11:57 PMJun 8, 2014 at 12:21 AM

The $258.7 million fiscal 2015 budget is in the hands of the City Council now, and Mayor Will Flanagan warned that if it isn’t approved as proposed, the city could face drastic cuts and layoffs come July 1.

Jo C. Goode Herald News Staff Reporter @jgoodeHN

FALL RIVER — The $258.7 million fiscal 2015 budget is in the hands of the City Council now, and Mayor Will Flanagan warned that if it isn’t approved as proposed, the city could face drastic cuts and layoffs come July 1.

“If this budget doesn’t pass, the city goes off the cliff,” Flanagan said. “If the budget doesn’t pass, we go to a 1/12 budget and the way it was briefed to me the FY14 budget carries over.”

That would mean, Flanagan said, having only 140 firefighters being funded as opposed to the proposed FY15 budget that funds 175 firefighters.

The School Department, Flanagan said, would stay funded at the FY14 level of $91 million instead of the $97 million to get to the state-mandated net school spending.

The city wouldn’t get the additional tax revenue from the 2.5 percent tax increase, and the Police Department would be operating short $1 million, Flanagan said.

The mayor’s cautionary words come on the heels of rumblings from some City Councilors who have expressed the possible rejection of the city budget and others who are welcoming additional information and debate.

The council’s Finance Committee will hold its first of four planned public hearings on Monday at 6 p.m. in City Council Chambers before a vote that must take place before June 30, the end of fiscal 2014.

On Friday, Flanagan announced that he would attend the City Council meeting — a rarity during his tenure as mayor — to be available to answer councilors questions and concerns and to advocate for the passage of the budget.

Speaking to The Herald News editorial board on Wednesday, Flanagan and his finance team, City Administrator Cathy Ann Viveiros and Treasurer John Nunes, outlined a budget they said will help the city “pull itself up by its bootstraps.”

As proposed, the fiscal 2015 budget contains an overall increase of 2.87 percent, or $7.2 million more than the fiscal 2014 budget.

On the revenue side of the proposed budget, the 2.5 percent tax increase will raise $2.06 million in new revenue.

The administration will transfer a majority of the stabilization fund, at $3.35 million, to the general fund, leaving just $250,000 in the fund.

Flanagan said the administration anticipates $3 million will be replenished by year’s end when the state Department of Revenue certifies the city’s free cash.

Nunes said the state recommends a municipality’s stabilization fund equals 5 to 7 percent of the total budget, but said not meeting that level won’t affect the city’s bond rating.

“So even though we haven’t met the benchmark, we’re still managing to have sufficient resources that we can get attractive bond borrowing rates,” Viveiros said.

On school spending, the administration has calculated that the city’s contribution to meet net school spending is $97 million, said Viveiros, despite the School Committee’s claim that it requires $99 million.

The administration is estimating new growth in the city at $1.2 million; that includes the expansion of Saint Anne’s Hospital, Sam’s Club, Walmart, and new housing coming onto the tax rolls, according to Nunes.

The redesign of municipal health care benefits is expected to reduce expenses by $6 million. The administration was originally planning to move the city workers into the controversial Group Insurance Commission, but the municipal workers group went to Blue Cross Blue Shield, the city employees’ current provider, and came back with two alternative plans, said Viveiros, with a premium option and a self-insured option.

Viveiros said the city is still considering which option it will choose.

“But the savings are there,” Viveiros said, “and that is a structural change because we change the benefit schedule.”

In an equally controversial structural change for additional revenue, the fiscal 2015 budget includes the pay-as-you-throw waste disposal plan that the administration anticipates will add $3.5 million to the city’s coffers, offering a mechanism to fund firefighter positions that would have been lost due to the expiration of the federal SAFER grant and helping to close the $1.7 million gap from the loss of revenue in host fees from the closing of the landfill.

In addition, said Viveiros, the new plan reduces expenses in sanitation due to an expected increase in recycling.

In the police department, five positions will go unfilled at a savings of $350,000, and adding 33 positions to produce a complement of 175 firefighters will cost $3.3 million if the budget is approved by the City Council.

By state mandate, the city must contribute more than $2.17 million into the retirement fund, but will gain an additional $109,943 from an overlay account reserve; free cash from fiscal 2013 of $364,993; and $500,000 in funds from the Federal Emergency Management Agency for damage from Superstorm Sandy and the winter storm Nemo.

Under Viveiros’ city administration department, the administration appropriated $60,000 for a tourism director. Part of the position could be funded from an unfilled $35,000 grant writers position.

The money, Viveiros said, is close to the unused $100,000 mandated by the City Council in fiscal 2014 for an economic development position.

The administration is still considering whether to hire a full-time person or hire a contract worker to develop city tourism.

“My goal is to fulfill the pledge I made to the council last year,” said Flanagan.

The $100,000 in fiscal 2014 will be moved to the city’s free cash, officials said.

“At the time, we were very uncertain how that position would work and couldn’t take on the added burden,” Viveiros said.

The $258.7 million budget would be funded through $129.9 million in state aid; $85.9 million in real estate taxes; $15.5 million in local receipts; and $43.9 million from other sources.

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